Big Tech tests the waters of the music stream

SAN FRANCISCO, Fri Mar 22, 2013 — Technology giants Apple, Google and Amazon are furiously maneuvering for position in the online music business and looking at ways to make streaming profitable, despite the fact that pioneer Pandora has never made a profit.

It has been more than a decade since the iPod heralded the revival of Apple and presaged the smartphone revolution, even as music-sharing site Napster was showing the disruptive power of the Internet in the music business.

Now Google, Amazon.com Inc. and Apple are among the Silicon Valley powerhouses sounding out top recording industry executives, according to sources with knowledge of talks and media reports. Streaming service Pandora is spending freely and racking up losses to expand globally. Even social media stalwarts Facebook and Twitter are jumping on the bandwagon.

All of them see a viable music streaming and subscription service as crucial to growing their presence in an exploding mobile environment. For Google and Apple, it is critical in ensuring users remain loyal to their mobile products.

Music has been integral to the mobile experience since the early days of iTunes, which upended the old models with its 99-cent per song buying approach. Now, as smartphones and tablets supplant PCs and virtual storage replaces songs on devices, mobile players from handset makers to social networks realize they must stake out a place or risk ceding control of one of the largest components of mobile device usage.

About 48 percent of smartphone users listen to music on their device, making it the fourth most popular media-related activity after social networking, games and news, according to a ComScore survey of mobile behavior released in February. Users ranked a phone’s music and video capability at 7.4 on a scale of 1 to 10, with 10 being most important purchase consideration factor, according to the study.

“Music is very strategic for the various electronic devices Samsung manufactures,” said Daren Tsui, CEO and co-founder of streaming music service mSpot, which Samsung bought last year to create the Music Hub service now available on Galaxy smartphones in the United States and Europe.

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